Intel/NVIDIA bombshell: two rivals team up

Intel and NVIDIA have announced a settlement and a cross-licensing agreement …

Intel and NVIDIA have announced a six-year, $1.5 billion dollar technology cross-licensing deal that marks the end of a long patent dispute between the two chipmakers. On a conference call this afternoon, NVIDIA representatives described the agreement as a way to extend each company's access to the other's technology.

Intel will pay NVIDIA $1.5 billion over the next six years for access to its patent portfolio, which includes its GPU and supercomputing technology. In addition to the cash, NVIDIA will also get access to parts of Intel's patent portfolio, including patents covering microprocessors and chipsets. However, the deal excludes proprietary Intel x86 designs, and some other areas like flash memory.

If this sounds like a big deal for both companies and for the PC industry as a whole, that's because it is.

"The cross-licensing agreement allows Intel to integrate NVIDIA technologies and those that are covered by our patents into their CPUs, such as Sandy Bridge, for example," said Jen-Hsuan. "And a cross-license allows us to build processors and take advantage of Intel patents for the types of processor we're building—Project Denver, Tegra, and the types of processors we're going to build in the future."

As for the fabled NVIDIA x86 project, Jen-Hsuan definitively shut that down once and for all, and he did so multiple times.

"We have no intentions of building x86 processors," he stated, before explaining that Project Denver represents the future of processor efforts at NVDIA. "Our intention is to capitalize on the growing popularity of ARM processors... We've always felt that building yet another x86 processor when the world is a-flood with them is a pointless exercise." NVIDIA wants to build "the processor of the future," he said.

Jen-Hsuan repeatedly pointed to the 2004 cross-licensing agreement that NVIDIA entered into with Sony for the development of PlayStation 3 technology as a direct precedent of today's Intel deal. "The Sony agreement has generated more than $500 million in royalties," he said, which makes the Intel deal already three times larger.

"[The Sony deal] is a very similar thing to what we're doing with Intel. There's a lot of products that Intel would like to make that would include our technology and vice versa."

One of the products that NVIDIA will not be making as a result of the settlement is an Intel-compatible chipset. Jen-Hsuan made it clear that the company has stated that it has no plans to produce any more Intel-compatible chipsets, and despite settling the DMI bus licensing dispute that shut NVIDIA out of the Intel chipset market, the GPU maker is sticking to its guns.

With today's announcement coming on the heels of the Consumer Electronics Show, it's clear that the past seven days have been as huge for the PC and microprocessor industries as any in recent memory.

Correction: NVIDIA wrote in to tell us that our original headline was not accurate. An NVIDIA spokesperson said, "Licensing a technology is different than incorporating an entire processor. The settlement provides Intel with access to our IP and patents, such as Sandy Bridge which already uses NVIDIA technology. The license enables Intel to extend that model for the next 6 years."

Also, I deleted the following text from the article: "On the Intel side, NVIDIA CEO Jen-Hsuan confirmed that Intel could use the licensing agreement to produce a Sandy Bridge successor with an on-die GPU based on NVIDIA technology." It looks like NVIDIA's stance is that there's already NVIDIA IP in the Sandy Bridge IGP, because Sandy Bridge's GPU infringes on NVIDIA patents. This wrinkle wasn't at all clear from the announcement or the call—at least, it wasn't clear to me.

I'm sorry, but Nvidia might consider a particular shader optimization nvidia technology. Just because now intel can use that particular optimization does not mean that intel will have nvidia designed gpu's on intel processor dies. This seems extremely unlikely to me at least. Anyone interpret it the same way as me?

Yes, that was my interpretation. Access to patents means they can use Nvidia-specific technologies (practical example: a hardware interface to make Optimus smoother), NOT that they have the rights to just put an Nvidia GPU on die whenever they want. Those rights would cost Intel a lot more than $1.5B to acquire.

$1.5B paid to them over five years AND access to microprocessor patents that will most certainly influence their ARM processors' designs? That sounds like a pretty good deal for NVIDIA. But on second thought, how far out there is the idea of a grid of CUDA cores on Xeon die? I'm starting to get turned on.

Well... Larrabee is basically just that. And even if it's slightly worse than Nvidia per unit, Intel's process advantage of half a node to a node should make up for it.

@mikiev

Nvidia's GPUs, or even just the shader design, are worth far far more than $1.5B. This agreement can't possibly give Intel access to what we would call an Nvidia GPU on an Intel CPU die, not even "could". The title says "look for", that's even stronger than could. But they can't - they can just use some technologies.

Intel has $20B+ of cash on hand. They could do it. But I think it would be harder to integrate Nvidia's corporate culture into theirs than to just develop a decent GPU which they are halfway there to given Sandy Bridge and Larrabee. The margins on consumer GPUs are far below what Intel expects anyway, hence why Knights Corner is targeting HPC / GPGPU first.

Sometimes cash alone isn't enough to buy a company. Other parties must give their blessing first. This is the answer to 90% of "Why doesn't company A just buy company B" questions that people seem to be asking on a daily basis.

Intel has $20B+ of cash on hand. They could do it. But I think it would be harder to integrate Nvidia's corporate culture into theirs than to just develop a decent GPU which they are halfway there to given Sandy Bridge and Larrabee. The margins on consumer GPUs are far below what Intel expects anyway, hence why Knights Corner is targeting HPC / GPGPU first.

I was skeptical when Intel five days ago said that the thing after Sandy Bridge would have programmable shader support. I thought they were just lying to save face against Fusion. Now I see what they had up their sleeve. All I can say is, Oh snap!

ARM is getting dangerously close to laying the smack down on Intel, and Intel is finally shaking in their boots.

Especially after MS basically gave into the finger saying they're working on porting all their stuff to ARM, after Intel has begged MS for a good touch screen OS.

Waters are definitely getting bloody. Sharks are on the fringes.

I agree completely. This is more fallout from the Nvidia/ARM announcement and a follow on to Microsoft's capitulation. It may even be related to AMD's CEO's sudden departure as well, who knows. This is a massive change in the industry but not surprising. For the past 2 or 3 years the average consumer has been getting and paying for far more computer than they needed sans gamers, developers and content creators. It's hard not to expect that after the consumer space figures out the WebTV, the full fledged computer market is going to experience yet more contraction.

Bill Gates called it and Apple started it and maybe ARM wins it. In a word, hilarious. For some time, I've felt like Apple has really been ignoring the desktop and perhaps this is why. Apple was also pretty prescient to combine the phone platform with the pad of which the changes are rumored to be moving up stream into the desktop OS although iOS is already a subset. You really have to wonder why it is taking Google so long to do the same. A consistent experience across platforms makes the most sense and they can't compete with Apple until they can span the full range of ARM's offerings. Seriously, can they take longer?! At any rate if Motorola keeps it up and continues to wield Android on phones which they had previous success at, I can see them riding Android "back to the future" and doing TV as well.

This is turning out to be anybody's game and that's becoming more clear by the day.

I expect (read as 'want very badly') to see ARM courting the BYO Linux/BSD community any day now as ARM could fairly quickly capitalize in the Linux/BSD space. It's not hard to see getting ARM products from Directron and the like. A new ecos is good for the industry but its also good for builders as well. ARM is a proven manufacturer and with Nvidia and Microsoft loudly cooing to ARM's entreaties, this isn't likely conjecture.

I'm sorry, but Nvidia might consider a particular shader optimization nvidia technology. Just because now intel can use that particular optimization does not mean that intel will have nvidia designed gpu's on intel processor dies. This seems extremely unlikely to me at least. Anyone interpret it the same way as me?

Yes, of course. People love exaggeration and hyperbole, don't they? Here's my take on this announcement:

Intel: "Take your lawsuits and go away and we will pay you $1.5B."

nVidia: "Why, sure! No problem! That's what we wanted, anyway."

The rest of this very vague and deliberately opaque press-release? Window dressing to ensure that neither side, but most especially nVidia, loses any public "face" because of the settlement.

Why doesn't Intel just put off buying one of its executive's solid gold toilets for 6 months and just buy NVIDIA outright?

Because this is at least $10B cheaper, cash-wise. They may not expect the rest of NVIDIA to be able to maintain current profits into the future (AKA Intel likely expects they'll be able to bury NVIDIA). There would likely also be FTC and Euro regulation issues with that as well (given Intel's checkered past in this regards to it's business practices). By maintaining separate entities, even though they are cooperating in this area, that's less of an issue (maybe not a non-issue but a lot less an issue).

"We've always felt that building yet another x86 processor when the world is a-flood with them is a pointless exercise."

Because flavours of ARM CPUs are so very, very hard to find? O_o

Don't you just love it whenever people suddenly discover a technology exists inside a device they bought that they think it was the company that marketed the device they bought that invented it, and invented it "just yesterday"? Heh... It's as reliable a phenomenon as weather.

I'm sorry, but Nvidia might consider a particular shader optimization nvidia technology. Just because now intel can use that particular optimization does not mean that intel will have nvidia designed gpu's on intel processor dies. This seems extremely unlikely to me at least. Anyone interpret it the same way as me?

Nope, you're way off base. I'm typing this on my shiny new Intel Phenom II X6 - It's fast, but I probably should have waited for the new AMD i5-2500K. It's still much faster than my VIA Atom netbook, though.